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Serbia to limit airport growth outside Belgrade

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Serbia will cap passenger growth at its secondary airports on a temporary basis as part of the 25-year concession agreement for Belgrade Nikola Tesla Airport with France's VINCI worth 1.2 billion euros. Despite initially denying that limitations would be imposed on the number of travellers outside the capital, the Serbian government has now admitted that figures will be confined to one million passengers for each airport in the country within a 230 kilometre radius of Belgrade until Nikola Tesla Airport reaches twelve million travellers per year. However, the government argues it is unlikely for any secondary airport to get to this figure before the country's busiest achieves its target. Conversely, VINCI would be either subject to a cut in its annual concession fee to the state or the concession itself would be extended past the 25-year period, Zoran Ilić, the Assistant Minister for Air Transport at the Ministry for Construction, Transport and Infrastructure, told the "Aljazeera Balkans" network.

The move could limit growth at Niš's Constantine the Great Airport, which last year handled 331.582 passengers. The city has been hit by a wave of protests over the government's plan to take over the airport's operations from local authorities. However, the state maintains that Niš will continue to develop under its management and is unlikely to reach the million passenger mark before Belgrade welcomes twelve million travellers in one year. According to estimates published by Niš Airport last year, it anticipates handling 650.000 passengers in 2021. On the other hand, VINCI has set a target for Belgrade to welcome at least seven million travellers per year by 2024 and ten million by 2030.

On the other hand, the Serbian Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, has rebuked her assistant and noted that limiting airport growth has not been formalised as part of the concession agreement, which will be made public upon the financial close of the deal sometime between September and November. In a statement, Ms Mihajlović said, "Every airport in Serbia should and must develop in line with market conditions. The concession agreement for Belgrade Airport states the need for "consultations" with the concessionaire only and exclusively until Nikola Tesla Airport reaches twelve million passengers per year and if any other airport within a radius of 150 to 230 kilometres handles over one million travellers per year. However, it is of utmost importance to note that both conditions must first be met for this to happen". She added, "Based on all the analysis we have carried out, such a scenario will not occur because Belgrade Airport will be handling twelve million passengers per year long before Niš welcomes its millionth traveller in a single year. Despite this, in the event that Niš reaches one million before Belgrade handles twelve million, Serbia has no obligation to automatically pay out any damages to the concessionaire. In such case, the government will have a duty to explain and prove to the concessionaire that the figures were achieved as a result of objective market trends which have no affect on Belgrade Airport, thereby avoiding any compensation or an extension of the duration of the concession".

Well, now we know why the French decided to pay that much. They were aware of Serbia's other airports and avoided this scenario in case a new concession was given to INI or Kraljevo and therefore competition for them. Just imagine in 2019, Serbia decides to put INI for concession and Fraport wins, then how will Vinci prosper then?

Seriously??! This is one of the most strangest and dumbest decisions of all times. In times where worldwide traffic is growing significantly every year, they decide to put a limit.What's wrong with INI reaching 1 million and more?? This will only boost the region!! Check Charleroi or Katowice or Ohrid. LCC is the future, enough of useless protectionism!! This is madness!

@Anon 9:30...You are absolutely correct. For years everyone in Niš is under the impression that Belgrade is better off by default. Then the government wants to "help". Now this. No wonder they hate the Belgrade regime. Only a few years ago they ripped down a banner in Niš advertising Belgrade and "Beograd na vodi". Then you see this. No wonder there is that sour taste for everyone.

I know Albania did but it was even more extreme. They didn't allow any traffic at any other airport besides Tirana. In the end the concessionaire left TIA and the government got a new investor and renegotiated the terms.

Anon 9:13 you're 100% correct. It's always been the case. Belgrade first, then Novi Sad because of it's geographical position and then the Belgrade outskirts and then finally Niš and the southern regions get the crumbs that are left over. Now it's not just crumbs but rations. Really disappointing behaviour by this government.

They could have easily supported their national carrier and based an ATR here to grow that revenue. But obviously they are trying to satisfy the needs of etihad and Vinci as well. Too many holes to fill...

What peak are you talking about? Just because an airline recently started flights and dropped them doesn't mean it's over. I just remind you when BEG gained so many new carriers and then lost almost most of them but look at it, a top 100 Europe airport.I think the next destination from INI will be Athens following the logic of Kutaisi which has similar traffic to INI.

Well it is. I am really tired of the joke comments about INI's growth calling it a hub, INI-LAX and comparing it to ATL, AMS or LHR.Just because we are all happy with the developments doesnt mean others have to laugh about it. Yes, 165% will not be maintained yearly but the percentages will ALWAYS be positive for a quite long time.

BEG cannot reach 12 million soon. I mean these figures are made by BUD, which is a much, more advanced airport and took them more than a decade. This can be achieved if Serbia joins the EU, then that will be another story.

It’s for all other airports combined. But this is something the government won’t admit yet. Just like they denied any limitation for secodary airports in the beginning. The same way that the government won’t admit that the concession was drafted continuously with the supervision of Vinci.

I love when I hear "experts" here that they will not be able to reach a million passangers by 2021. Those are the same "experts" that told us few years ago, there is no need for airport in Nis and that the only airport needed in Serbia is the one located in Belgrade. What I am really concerned here is, will the same conditions apply for the airlines once the airport is "stolen" by state? Will those airlines stop flying from INI as Nis Airport broke contract and can sue them with multimillion-euros penalties? And why SRB government can help BNX even is not in the same country, but they have to expropriate INI to invest in it! This is real madness!

I don't think the current airlines will be affected BUT, if the central government decides to increase the 3€ tax, then be sure that FR will immediately threaten to leave and we have many examples of regional European airports that were threatened like that.

It doesn't matter if INI can reach 1 million passengers by any given year. This kind of limitation simply shouldn't exist. As a responsible government you don't just favour the rich parts of the country at the expense of the poor. If anything, you should do the opposite.

Maybe they made a calculation? Maybe the calculation showed that by limiting INI to 1 million would get them 100 millions more from VINCI, while Nis can not make that profit in ... 50 years? And then they invest 10 millions out of those 100 in Nis? It is not all in passenger numbers, you know, there is something about profit. I would rather have 800k passengers with 5 million profit a year than 2 million passengers with 1 million profit annually. Please look at the wider picture.

Easy peasy japanesey...don't simply focus on the 3€ airport tax only. By bringing a tourist to INI, they pay the 3€ airport tax, the taxi which taxist will pay tax to the state, the hotel, the food, they will leave money. So if Serbia invested 1 million in INI's refurbishment, then the money from the 1 million tourists will be collected from the taxist, hotelier, restaurantier, etc, etc. Which means jobs, money circulation, rise in the standard. Air traffic figures are really important, trust me. The more you have the more people will spend and leave money in INI.INI traffic is pure O&D which generates much more revenue compared to BEG's transfer traffic. BEG relies a lot on JU as it generates nearly 60% of its traffic. Voilà !

You do realize that 90% of passengers in INI are either people working in Western Europe or Serbian tourists going to Western Europe? Direct tourists who come to Nis as tourists via INI are less than 10% ... but this is just my theory ...

W6 has 13 destinations out of BEG, 8 of which are to Germany and Sweden (most likely gasto) but I wouldn't consider the rest as gasto.MLA and LCA are leisureEIN maybe studentsBVA turizamBSL mix - study, turizam and gasto

Speaking of government limitations and focusing mainly on BEG, now I am also convinced more than ever that this is also the main reason why W6 never expanded its BEG base or we saw FR intentions. I think the the central government are putting some kind of limit for them too. There is no other explanation.

What wrong with you guys? It’s great to see INI functioning, they had less then 1M passangers in total, from the opening day. They are doing good now, which is great.

BEG’s concession is comparatively the best in the region, without the questions and it is normal to accept some kind of limitations, for that kind of price. 1M “low cost” passangers would generate peanuts in comparison to the amount of concession.

The concession money will go to the budget and will not be spent 100% on Belgrade, even it is gained on Belgrade’s airport. Let’s be fair and realistic!

Oh, give me a break!! The concession just sounded too perfect and was too good to be true. The GoS was already aware of the winner and this was negotiated or even bribed. How come you prefer 1 billion euros and not allowing the growth of the rest of the airports in the country??????BEG is not Serbia. No wonder why the autonomy was taken from INI.Also, HOW will Kraljevo prosper?? Built and forgotten and millions and millions of €€€€ spent.Things are just so weird sometimes in Serbia.....If LCC is "peanuts" why are so many airports in the world being served more and more.Just live your JU the national carrier and BEG the national airport of all Serbia. Do not complain after this that southerns will massively leave the country and head to Germany where there are 440,000 jobs available.......

- GoS got great money by Vinci to run BEG in next 25 years. That money will be used for whole Serbia, not only for Belgrade (at least it should be so).

- Vinci wanted to be protected and not to lose passengers in BEG because of INI. KVA etc. They conditioned GoS and requested limitations to be put on other airports. From their point of view it is logical and understandable.

- Taking in consideration that no plane from W6 or FR has its base at INI at this moment (and it remains open question if any will be based at INI soon) GoS probably made a calculation that reaching 1 million passengers will not go so fast as first 330.000 passengers. The growth will surely be slower in incoming years and reaching 1 million at INI should match reaching 12 million in BEG in 8-9 years.It was some kind of gambling - will they get more money from Vinci for BEG if they agree to limit INI or they will get more money from INI by not limiting it and letting ULCC open their new destinations. As it remains uncertain how many new destinations would be open from INI GoS probably wanted to be on the safe side by getting for BEG promised money from Vinci rather than wait and see how profitable INI might become.

- Even if it happens W6 or FR to base one plane at INI GoS probably made plan B to take over INI from city authorities in order INI can be directly controlled by GoS. If so, GoS can decide about the landing fees and by increasing them directly influence number of passengers from INI. It is actually the real reason behind controlling INI and not so called "investments" by GoS in INI.

- If ULCC's continue to fly to INI even with 6 EUR tax GoS will swallow the frog and pay penalties to Vinci for max 1 or 2 years, but nobody will say that no plane is allowed to land at INI if it goes over 1 million.

- It is not fair INI to be anyhow limited and I am surely not justifying this move of GoS, but I wish to believe they were looking at whole picture. Wish to believe.

I'll try not to go into commenting of politics and (lack of) transparency, but this deal makes sense keeping in mind the great terms of the concession(if they are like reported). I believe that Niš has better chances of reaching a million before Beograd reaches twelve, over the course of the next 25 years. If I were the person (like no single person should have the power to decide by himself)to solve this problem with the money from VINCI I would firstly invest in the infrastructure of Kraljevo airport (runway and apron), which can be done in less than 5 yrs. By that time Niš might approach 1 million and then government can make a deal of large upgrade of that airport if the offered seats are up to million per year and transfer future interested operators and lines to Kraljevo. The good thing about this deal is that no SINGLE airport should surpass a million pax per year. If needed this pattern can be used further, by the time BEG reaches 12 million. It's a win-win situation for everyone. The only thing that puzzles me is weather it's 150-230km in the deal or just up to 230km distance from Beograd?!

- INI has limited potential (as somebody noted). god know when 1mil could be reached. keep in mind that it is still below 400k and we have seen first route cancelations- Current Niš traffic is supported by subsidies coming from goverment budget. Also it's operations are supported by some discounted equipment from BEG- In order to develop Niš, investments are needed

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so, in my mind, making a cap isn't that big of a deal

what is big deal is that state is trying to takeover INI having no good reason to do that at all

and the investments must be made in INI regardless of it's legal ownership status. government must not justify their actions with these lame argument

hopefully, zorana will get a kick in the butt one more time. let's remember how she was ousted from minister of energy position (which is her field) because almost the same display of vanity

Contracts made between Nis airport and airlines must be made public. Once they are published we could see if they will be void or not. If contracts for Air Serbia/Etihad and Belgrade Airport/Vinci should be made public, so should contracts at Nis airport.

Please show me a legacy, let alone LCC carrier which would see any long-term interest in INI, knowing, that there is a limit to the passenger number? Which LCC would even think of setting a base there? OK, it probably isn't simple to grow from 340.000 to 1 mio passengers, but... Serbia is proving that it is just a administrative province, just as all the rest of ex-yu republics...I read somewhere, and I think it is not far from truth - it would not come as surprise if the concession money (at least major part of it) will actually go as state support for the Air Serbia fairy tale...So money will be circulating, foreign owners will prospect, and people....people will pay for that fun ride. Just observe what happened in Zagreb and Ljubljana.

guys, don't even try to argue with the center of univerce, cradle of modern civilization and last but not least Wizz ex-yu hedquater. Тhey anyway live in a parallel reality. Keep dreaming of those LX flights

Welcome to "Market Economy" serbian style. I am interested HOW the government intends to prevent/restrict Nis when they reach 1 million passengers? Serbia has open sky with the EU, so will they raise the the airport taxes or HOW????

When in hands of LCC monopolist, airports have no control of their destiny. INI can get bank loans to invest millions in needed infrastructure expansion to handle millions of passengers but there is nothing stopping W6/FR from moving to another airport where they can make more money. Who will then pay those loans back to the bank? Look at how BTS passenger numbers went up and down. Now that VIE is opening doors to LCCs BTS numbers will go down again. Frankfurt Hahn has carried losses of more than 100M for years. Their passenger numbers are down more than a million from decade ago. Now that FRA is growing LCC operation Hahn is screwed and same can happen at any other airport mainly dependent on LCCs like SKP TZL or INI.